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Corporate moves at ProAmpac have kept executives busy in the last few years at the Springdale packaging manufacturer.

The company went from $370.9 million of revenue in 2014 to $929.2 million of revenue in 2015, largely from a private equity-steered merger of Ampac Holdings and Prolamina.

And the deals aren’t finished for the 50-year-old firm’s new majority owner, Pritzker Group Private Capital. ProAmpac is working to integrate its latest purchase, Vitex Packaging Group of Virginia, into the fold.

ProAmpac is far from the only privately held company that have looked to external investors for growth. The Springdale firm is one of nearly 30 companies on the annual Deloitte Cincinnati USA 100 list have either gone public or been sold in the last three years.

The turnover of companies on the 2016 list is likely the biggest since the time it was first compiled back in 1983. Two companies listed on the 2015 list – AdvancePierre Foods and Medpace – had initial public offerings of stock earlier this year.

Ken Johnson packages mailer bags at ProAmpac in Springdale Monday November 21, 2016. ProAmpac is one of Greater Cincinnati's largest privately held companies. The company's headquarters is based in Springdale with manufacturing plants all over the world. (Photo: The Enquirer/Cara Owsley)

So how much money is out there? Global commitments to private equity funds are expected to reach $518 billion this year, beating out the post-recession record reached in 2015 of $466 billion, according to investment advisory firm Triago. Seeking an alternative to stock market volatility and low interest rates as well as being drawn by double-digit returns over the past decade, investors are driving the 2016 total to be the second-highest level ever behind 2008, Triago reported.

There are about 8,000 private equity groups in the United States and they collectively own more than 35,000 middle-market companies, according to Scott Cress, a Downtown-based senior manager of the tax consulting team at Barnes Dennig.

“As people build companies and grow them into successful companies, the private equity world is one avenue to exit, get some liquidity,” said Brock Denton, a partner and co-leader of Keating, Muething & Klekamp’s business representation and transactions group.

Much of the turnover on the Deloitte has been fueled by private equity firms looking to park money in successful companies seeking high returns. But the activity within the space has been on the rise since the end of the Great Recession, said Mark Greenberg, a partner at Silverstone Capital Advisors, a Downtown-based advisory and investment banking firm. He said the funds and investors looking to directly invest in companies often seek a return within a defined window of time, which can be about five to seven years. "Some of the funds we deal with are providing a 30 percent gross return," which has helped drive the popularity of the investment vehicle, he said.

That timeframe creates pressure on the private equity side to spend the cash they’ve amassed from investors, Cress said. Lately, it has forced private equity firms to increasingly turn their attention to smaller firms looking for hidden high-growth gems.

There was a time when private equity funds wouldn’t consider a deal for a company with less than $500 million in revenue, Greenberg said. But those days are gone, and several industry analysts The Enquirer reached said they’re aware much smaller companies becoming investment opportunities.

“They like firms with a great earnings history and great growth potential,” Greenberg said about private equity funds. “They like businesses they feel like they can grow further. You’ll find them in all kinds of industries.”

Board room at ProAmpac in Springdale, the packaging manufacturer company has been based there since the 1960's and now has plants all over the world. Photo shot Monday November 21, 2016.(Photo: The Enquirer/Cara Owsley)

Of the companies on the Deloitte 100 list, 16 have some or complete private equity ownership. Industry analysts say that’s likely to increase for multiple reasons.

Denton said one of the factors driving companies to look toward private equity or new owners seeking investment is demographics. Many large privately held companies are in their second or third generations of family ownership and there’s no immediate family heir with the interest or knowledge to carry on the tradition, Denton said.

Sixty-one firms on this year’s Deloitte 100 list are family owned and 16 are closely held.

“There's plenty of data out there to support that most businesses are owned by people who are near retirement," Cress said. "That dynamic alone drives a ton of this deal flow."

There’s also a sense among company owners that now’s a great time to cash out because while valuations remain at a high level, Cress said. The higher valuations are driven by many companies reaching record levels of earnings and their balance sheets are improving.

“If they’re getting picked off in the Cincinnati area, it’s because they are high-quality deals,” Greenberg said. “There has been a flight toward quality and because there’s some limitation on using debt to acquire companies, the pressure on equity is higher. In order to get a return, you have to have a quality company.”

One of those investment groups, Pritzker Group Private Capital, said made investment in what it believed to be a quality company. Chicago-based Pritzker Private Capital invests in North American middle-market companies with top positions in the manufactured products, services and health care sectors.

Officials from Pritzker bought ProAmpac, ranked No. 7 on the Deloitte list, from Wellspring Capital Management because the firm had an excellent reputation for innovation, world-class customer service, diverse product lines and a strong market position.

“ProAmpac is a combination of several smaller legacy organizations," ProAmpac CEO Greg Tucker said in a statement. "Although each company had its strengths, none of these companies could have achieved the growth and success ProAmpac is currently experiencing on their own. By bringing together the best players in the industry, ProAmpac provides an enhanced product portfolio to our customers, and even more opportunities for our employees.”

Petroleum products distributor RelaDyne, ranked No. 24 on the Deloitte list, was formed in 2010 from the amalgamation of four successful businesses. However, the roots of Blue Ash-based RelaDyne are in the family owned Four O Corp. founded in the 1960s. Earlier this year, AEA Investors, a private equity backer of RelaDyne, sold the firm to Audax Private Equity. Financial terms of the deal were not disclosed.

A four color printing press prints bags at ProAmpac in Springdale Monday November 21, 2016. ProAmpac is one of Greater Cincinnati's largest privately held companies. The company's headquarters is based in Springdale with manufacturing plants all over the world. (Photo: The Enquirer/Cara Owsley)

The rising interest in Cincinnati’s middle-market companies shows the region has a strong business climate for a range of enterprises from startups to large corporations such as Procter & Gamble and Kroger, Denton said.

Other reasons for owners giving up control include the desire to create a "legacy," diversify their estate or using a sale with an eye on creating a larger benefit to the community. That said, there are plenty of reasons why an entrepreneur would decide not to sell despite the are willing to cede control of their enterprises, Cress said. Many owners are risk averse, have their net worth tied up in business or cannot a safe investment alternative to running the business.

Charles Shor, a Hyde Park resident who is the former owner and CEO of Duro Bag, said there are some downsides to increased private equity involvement in private companies. Shor’s father founded Duro Bag, the Florence firm that was the world’s largest paper bag company, which was sold in 2014 to Hilex Poly.

*He said higher levels of focus on short-term returns instead of making capital expenditures is “where we’ve gotten lost.”